The emphasis on shareholder value within our corporate governance system contributes to short-termism and is damaging both our economy and society. Reform is possible and urgent. There are a wide range of practical ideas for what form it should take, including in the area of stakeholder representation within decision-making within companies and in the wider…
The Pfizer-Astra Zeneca takeover tussle illustrates yet again the problems with the UK’s system of mergers and takeovers. Nonetheless, there are some interesting differences in comparison to the Kraft takeover bid for Cadbury back in 2010. The media and political debate around the merits of the Pfizer bid has centred largely on the likely impact…
The Chancellor has introduced some far-reaching changes to pensions in the budget, in particular to defined contribution or DC pensions. Under the banner of ‘freedom and choice at retirement’, he is changing the tax rules to make it easier to take more or even all of a DC pension pot in a lump sum at…
The TUC has published two reports on workers’ voice in corporate governance. The financial crisis has exposed the weaknesses of the UK’s corporate governance system and its reliance on shareholder engagement as the main discipline on company boards. The failure of shareholders to prevent a series of decisions by banks and other financial institutions that…
A quick postscript to my recent blog reporting that the Parliamentary Commission on Banking had recommended that directors’ legal duties be changed to require directors to put financial safety and soundness of the company ahead of the interests of its shareholders. The TUC has long been a critic of shareholder primacy – we believe that…
I have blogged before about the flaws of shareholder primacy, and the TUC has long argued that directors’ duties should require directors to promote the long-term success of the company, rather than prioritising shareholder interests as at present. Now the Parliamentary Commission on Banking has picked up this theme in its recent Report, arguing: The…
The TUC, UNISON and Unite have launched a new group that aims to put union values at the heart of corporate governance. From 1ST April, the pension funds of the TUC, UNISON and Unite will vote together at FTSE 350 AGMs. We have developed a set of Trade Union Voting and Engagement Guidelines based on…
The TUC has long been concerned that the tax deductibility of interest payments on corporate debt encourages companies to carry high levels of debt and fuels highly-leveraged company buyouts. So our ears pricked up when George Osborne acknowledged in his Budget speech that the UK tax system ‘biased debt financing over equity investment’, implying –…
The Chancellor has announced that the first £2,000 of shares given to workers who become ’employee shareholders’ will be exempt from both national insurance and income tax. Plans for a new ‘employee shareholder’ scheme were announced at the Conservative Party Conference. Under the scheme, employers will be able to offer employees at least £2,000 of…
The Labour Party has today published an independent review Overcoming Short-termism within British Business carried out by Sir George Cox, a former Director General of the IoD. There is much to welcome in the review. In particular, it makes a powerful case that short-termism, which it defines as ‘the pressure to deliver quick results to…